Another Reminder of Why Corporations Cannot Police Themselves

This article, written by Reuben Guttman and Traci Buschner who practice law with Guttman, Buschner & Brooks PLLC in Washington DC. Published in the McClatchy-Tribune News Service on August 13, 2014.

What kind of people would knowingly expose someone to the risk of infection just to make a buck?

Read carefully the allegations underlying the recent $97 million settlement between the U.S. Department of Justice and Community Health Systems and that question may be answered.

Responding to lawsuits brought under the False Claims Act by multiple whistleblowers, the government investigated and came to terms with the Nashville-based hospital giant resolving allegations that patients were admitted from emergency rooms to overnight stays not for medical necessity but for the purpose of racking up Medicare and Medicaid revenue and bilking private payers.

No harm, no foul. Right? Just skimming a few dollars off the government with no potential harm to patients? Right? Wrong on both counts!

While hospitals are places to get well, staying in a hospital is – these days – a place to acquire a hospital infection. According to allegations brought by three of the whistleblowers, including a physician at a CHS-owned Philadelphia hospital, overnight admission to a hospital absent medical necessity is not prudent medical practice. And, the rationale behind that conclusion is not just about saving dollars. It is a question of health and safety.

So, according to the allegations spanning multiple whistleblower law suits – as the publicly traded CHS was gobbling up community hospitals across the country, it was supporting its buying fling by admitting patients who allegedly did not need hospitalization.

And so the story goes; once again whistleblower lawsuits brought under the False Claims Act – a law allowing private citizens with knowledge of wrongdoing to bring suit in behalf of the government – was being used to recover taxpayer dollars and expose conduct placing citizens at risk. Technically these suits are about the submission of false claims for government payment or approval. In reality they are about much more.

In recent years, whistleblower litigation under the False Claims Act has uncovered conduct by giant pharmaceutical manufacturers including Abbott, GlaxoSmithKline, Amgen and Pfizer that has resulted in criminal convictions and billions of dollars in recovery for hard-pressed government payers. In each case the Government paid hundreds of millions of dollars in reimbursement for prescriptions that were the resulted of marketing tactics that violated the law. Patients were given medicine for reasons not solely grounded in medical necessity or rationale.

To be clear where companies including Abbott and Glaxo pleaded guilty to marketing schemes that placed patients at risk, they did so knowingly and in each case told the court they were pleading guilty because they were indeed guilty.

The tragedy is that the CHS settlement – a civil settlement – is yet another reminder that people captured by a corporate culture have willingly placed countless unwitting citizens at health risk all for the purpose of making additional profit. That is indeed the tragedy. The travesty is that even after the health care providers we once trusted have plead guilty to conduct that places people at risk, the U.S. Chamber of Commerce – or at least a few lawyers speaking on its behalf – still claim that these purportedly outstanding companies need to be cut some slack. Testifying before the U.S. House of Representatives’ Judiciary Committee Subcommittee on the Constitution and Civil Justice on July 30, lawyers for the Chamber attacked the False Claims Act, arguing that corporations should police themselves with whistleblowers being required to first report their concerns to corporate internal compliance personnel before alerting government officials.

Of course, these mouthpieces for the Chamber neglected to mention that every pharmacy giant that has pleaded guilty over the last five years had internal compliance programs that did not work so well. Actually, come to think of it, CHS also had an internal compliance program.

So what kind of people would knowingly expose someone to the risk of infection just to make a buck? One quick answer is definitely not the kind of people we want policing themselves for good behavior.